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Monday, October 04, 2021

MBA Survey: "Share of Mortgage Loans in Forbearance Decreases to 2.89%"

by Calculated Risk on 10/04/2021 04:00:00 PM

Note: This is as of September 26th.

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 2.89%

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 7 basis points from 2.96% of servicers’ portfolio volume in the prior week to 2.89% as of September 26, 2021. According to MBA’s estimate, 1.4 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 6 basis points to 1.38%. Ginnie Mae loans in forbearance decreased 7 basis points to 3.35%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased 14 basis points to 6.77%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 5 basis points relative to the prior week to 3.19%, and the percentage of loans in forbearance for depository servicers decreased 13 basis points to 2.93%.

“The share of loans in forbearance declined at a faster rate last week, dropping by 7 basis points, as exits increased and new requests and re-entries declined,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “While 1.4 million homeowners remained in forbearance as of September 26th , this number is expected to drop sharply over the next few weeks as many are reaching the 18-month expiration point of their forbearance terms. Most borrowers exiting forbearance through a workout are opting for a deferral plan, which allows them to resume their original payment, while moving the forborne amount to the end of the loan.”

Added Fratantoni, “Although call volume dropped in the last week of September, we expect that servicers will be very busy through October.”
emphasis added
MBA Forbearance Survey Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time.  Most of the increase was in late March and early April 2020, and has trended down since then.

The MBA notes: "Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.05% to 0.04%."